§33-8-3. General investment qualifications.
(a) Insurers shall acquire, hold or invest in investments or
engage in investment practices as set forth in this article.
Investments not conforming to this article will not be admitted
assets.

(b) Subject to subsection (c) of this section, an insurer may
not acquire or hold an investment as an admitted asset unless at
the time of acquisition it is:

(1) Eligible for the payment or accrual of interest or
discount (whether in cash or other securities), eligible to receive
dividends or other distributions or is otherwise income producing;
or

(2) Acquired under subsection (c), section fifteen of this
article; sections sixteen, eighteen or twenty of this article;
subsection (c), section twenty-eight of this article; sections
twenty-nine, thirty-one or thirty-two of this article; or under the
authority of sections of the code other than this article.

(c) An insurer may acquire or hold as admitted assets
investments that do not otherwise qualify as provided in this
article if the insurer has not acquired them for the purpose of
circumventing any limitations contained in this article, if the
insurer acquires the investments in the following circumstances and
the insurer complies with the provisions of sections five and seven
of this article as to the investments:

(1) As payment on account of existing indebtedness or in connection with the refinancing, restructuring or workout of
existing indebtedness, if taken to protect the insurer's interest
in that investment;

(2) As realization on collateral for an obligation;

(3) In connection with an otherwise qualified investment or
investment practice, as interest on or a dividend or other
distribution related to the investment or investment practice or in
connection with the refinancing of the investment, in each case for
no additional or only nominal consideration;

(4) Under a lawful and bona fide agreement of recapitalization
or voluntary or involuntary reorganization in connection with an
investment held by the insurer; or

(5) Under a bulk reinsurance, merger or consolidation
transaction approved by the commissioner if the assets constitute
admissible investments for the ceding, merged or consolidated
companies.

(d) An investment or portion of an investment acquired by an
insurer under subsection (c) of this section shall become a
nonadmitted asset three years (or five years in the case of
mortgage loans and real estate) from the date of its acquisition,
unless within that period the investment has become a qualified
investment under a section of this article other than subsection
(c) of this section, but an investment acquired under an agreement
of bulk reinsurance, merger or consolidation may be qualified for
a longer period if so provided in the plan for reinsurance, merger or consolidation as approved by the commissioner. Upon application
by the insurer and a showing that the nonadmission of an asset held
under said subsection would materially injure the interests of the
insurer, the commissioner may extend the period for admissibility
for an additional reasonable period of time.

(e) Except as provided in subsections (f) and (h) of this
section, an investment shall qualify under this article if, on the
date the insurer committed to acquire the investment or on the date
of its acquisition, it would have qualified under this article.
For the purposes of determining limitations contained in this
article, an insurer shall give appropriate recognition to any
commitments to acquire investments.

(f) Investments held and investment transactions entered into
before the effective date of this article are valid as follows:

(1) An investment held as an admitted asset by an insurer on
the effective date of this article which qualified under applicable
law in effect before the effective date remains qualified as an
admitted asset under this article; and

(2) Each specific transaction constituting an investment
practice of the type described in this article that was lawfully
entered into by an insurer and was in effect on the effective date
of this article continues to be permitted under this article until
its expiration or termination under its terms;

(g) Unless otherwise specified, an investment limitation
computed on the basis of an insurer's admitted assets or capital and surplus relates to the amount required to be shown on the
statutory balance sheet of the insurer most recently required to be
filed with the commissioner. For purposes of computing any
limitation based upon admitted assets, the insurer shall deduct
from the amount of its admitted assets the amount of the liability
recorded on its statutory balance sheet for:

(1) The return of acceptable collateral received in a reverse
repurchase transaction or a securities lending transaction;

(2) Cash received in a dollar roll transaction; and

(3) The amount reported as borrowed money in the most recently
filed financial statement to the extent not included in
subdivisions (1) and (2) of this subsection.

(h) An investment qualified, in whole or in part, for
acquisition or holding as an admitted asset may be qualified or
requalified at the time of acquisition or a later date, in whole or
in part, under any other section, if the relevant conditions
contained in the other section are satisfied at the time of
qualification or requalification.

(i) An insurer shall maintain documentation demonstrating that
investments were acquired in accordance with this article, and
specifying the section of this article under which they were
acquired.

(j) An insurer may not enter into an agreement to purchase
securities in advance of their issuance for resale to the public as
part of a distribution of the securities by the issuer or otherwise guarantee the distribution, except that an insurer may acquire
privately placed securities with registration rights.

(k) Notwithstanding the provisions of this article, the
commissioner, for good cause, may order under the state's
administrative procedures or equivalent, an insurer to nonadmit,
limit, dispose of, withdraw from or discontinue an investment or
investment practice. The authority of the commissioner under this
subsection is in addition to any other authority of the
commissioner.

(l) Insurance futures and insurance futures options are not
considered investments or investment practices for purposes of this
article.